Tesla’s Q2 earnings are coming July 22, and there’s already plenty to talk about — a price target hike, a blowout delivery number, and a stock that somehow dropped after the good news.
RBC Capital raised its price target on Tesla to $500 on Monday, up from $475, while keeping an Outperform rating. Analyst Tom Narayan said the increase reflects a 25% to 30% premium tied to a potential SpaceX acquisition scenario, based on unconfirmed media reports. That premium adds a 15% bump to Tesla’s intrinsic value estimate.
Tesla currently trades at around $419.77, so the $500 target implies about 19% upside from current levels.
That said, RBC’s own analysis acknowledges Tesla is trading at a high earnings multiple of 382.64. InvestingPro flags the stock as overvalued relative to its Fair Value estimate.
On July 2, Tesla reported it delivered 480,100 vehicles in Q2. That came in well ahead of JPMorgan’s estimate of 420,000 units and blew past the Bloomberg consensus of 380,700. Year-over-year, it was a 25% jump in volume.
Baird reiterated an Outperform rating with a $522 price target after the delivery numbers. JPMorgan kept a Neutral rating with a $475 target.
Despite the strong numbers, TSLA dropped as much as 7% on the day — one of its worst single-day moves in nearly a year. The market had already priced in the positive outcome during the run-up ahead of the report.
It’s a classic buy-the-rumor, sell-the-news situation.
Wall Street’s current consensus has Tesla earning $0.48 per share on revenue of about $25.4 billion for Q2.
Beyond the headline numbers, investors will be watching automotive gross margins closely. Any hint of pricing pressure or cost gains will matter. Energy storage growth and free cash flow will also be in focus.
FSD and robotaxi updates are likely to come up. Tesla launched a robotaxi service in Miami recently, with plans to expand to other metro areas by year-end, according to Morgan Stanley.
Tesla has also introduced a six-seat version of the Model Y in the US and Puerto Rico, a three-row setup with a 325-mile range.
The question heading into earnings isn’t just whether Tesla beats — it’s whether management can offer something new enough to justify a stock that trades at a forward multiple few companies can approach.
Tesla also announced a $200 weekly spending cap on AI tools for employees. Workers need approval to go beyond that limit, though the cap doesn’t apply to beta xAI products.
RBC’s Narayan also noted that the firm revised its intrinsic valuation work on Tesla and described its robotaxi analysis as distinctive in both approach and detail.
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